Location of Economic Activity and New Economic Geography : An Evolutionary Perspective

This research paper briefly summarises the origin and evolution of the New Economic Geography and compares it with other theories of industrial location. The New Economic Geography stresses the role of ‘second nature geography'. In second nature theories, cumulative causation mechanisms explain endogenous growth. It lays stress on the geography of distance between economic agents and emphasises the interactions between economic agents and in particular increasing returns that can be created by agglomeration